electronics. it surprised wall street in august it has a cash low of 14% and it's actually fairly valued. a great buy. >> thank you pete, i need a time. >> levi's, how about that? >> jim >> cleveland-cliffs. >> good stuff. good weekend, everybody. "the exchange" is now. thank you, scott, and welcome to "the exchange," everyone, on a big day for the markets, the economy and the u.s. stocks are staging a big turnaround after dropping sharply on news that president trump and the first lady both tested positive for covid-19 what does it mean for investors, for policy negotiations, for the campaign and the fate of this pandemic we've got it all covered today, and we begin with the latest on the president himself. kayla tausche joins us with that kayla?

>> reporter: the president was supposed to make a call about the coronavirus, but he asked vice president pence to lead that call instead. this was the only agenda item on the president's schedule today everything else had been removed overnight including a large rally set for tonight in florida. he is isolating in the white house residence throughout the day, and i learned from a senior administration official that the vice president may take on additional commitments depending on how the president's condition and his symptoms progress. many top aides to the president have tested negative in recent hours. the treasury secretary, attorney general, chief staff market meadows, larry kudlow and advisers jared kushner and ivanka trump the white house learned of the positive diagnosis of hope hicks, his top aide, as he was boarding the air force one

yesterday afternoon. mark meadows expects the rising number of cases in the white house to rise. >> we've tested a lot of people, and i can tell you mr. kushner, mr. scavino, myself have been tested and come back with negative results and yet, at the same time, i fully expect that as this virus continues to go on, other people in the white house will certainly have a positive test result >> reporter: to that end, three administration officials say that staffers who are working on site at the west wing today, which they describe as chaotic, have taken the rapid test that the white house displayed monday in the garden, and only those who tested positive are allowed to remain on-site. kelly? >> i saw the headline as it

regards joe biden, former vice president, obviously trump's rival in that campaign it says he will still travel to michigan after his negative test result, and michigan particularly sticks in our mind, because that's where trump really staked his campaign going into 2016 and it wound up paying off. i wonder about the importance of biden being able to continue to hold events like these >> reporter: well, michigan and pennsylvania are going to be two critical states, michigan not only for the presidential campaign, but there also is a contentious senate race there as well so armed with that negative test that the campaign just disclosed last hour, biden is it continuing with his commitments. the pool that is traveling with him has also been tested the pool has tested negative they have reported this morning, and we will keep you posted as the schedules evolve and some of these additional diagnoses come in, kelly. >> yeah. kayla, we appreciate it. kay kayla tausche, thank you

the stocks are lower on the recession today. we were down 400 points today. the nasdaq is lower, though. seema mody is here seema? >> the dow was down 434 points, but then comments from nancy pelosi on relief for the airlines, that helped the market rally down now, basically hugging the flatline, as you can see now in positive territory of 4 points take a look at the airlines' firmly positive territory, names like jetblue, united airlines and southwest seeing gains up 1% to 2%. travel had been under pressure across the board, specifically the cruise lines i reported earlier today that a meeting between cruise ceos and vice president mike pence that was scheduled for today at the white house has now been postponed. royal caribbean, norwegian and carnival down less than 1% on the other hand, as those

lockdown worries grow, some of those stay-at-home winners staying firm, names like domino's zoom and peloton, up 2.5% year to date. large cap names like facebook, apple and amazon all down 2% worth noting, these names are also down about 10% over the past four weeks. kelly evans, back to you >> seema, thank you very, very much let's dig into what the president's covid diagnosis and the big jobs report we got this morning all means for the political landscape and for the economy. joining me now is larry lindsey. he's oh of the lindsey group and counselor under president george bush larry, what is your opinion of how the positive covid test could change the election? >> of course the president is

handicapped because he's not able to campaign, and that's probably a negative. on the other hand, you know, he's a pretty tough guy, and everyone who knows him knows he's a tough guy you only have to watch his debate style and you know he's a tough guy, so i think he's probably going to come through the estimates are statistically he's probably got a 90-plus percent chance of coming through this, and i imagine if he does that he's going to come out stronger than ever >> larry, you were already a little skeptical about trump -- i don't know if i should say it quite like this, but about his re-election odds you said, look, this thing is really, really close not speaking to necessarily his survival here, but just having to curtail some of his activities like i mentioned to kayla, you've got joe biden heading to michigan tonight does this put the odds more in biden's favor, and what do you think the odds kind of look like overall at this point?

>> yes well, certainly in the short run, the vice president now has the campaign trail to himself. although if the past is any guide, having it all to himself does not exactly mean a hectic schedule he took a third of august off completely and basically did one event today. i don't think that's going to matter that much obviously, the president, given his poll position, needs every day he can get to campaign, and that's a disadvantage. on the other hand, if he comes through it, i think the contrast between him and vice president biden in terms of vigor will become quite stark, and, you know, i don't think this is necessarily going to shift the odds of what's going to happen on november 3rd or after november 3rd, as the case may

be >> so one final question on this, and then i want to ask you about the job support. but are you anticipating that the president is re-elected at this point >> i think right now it is a complete toss-up, and, you know, i know for our clients' sake, we're going to have to refine that as we get closer. you know, it's going to go into extra innings, especially if it's as close as we think it's going to be, and there's going to be a lot of contention, and i think that's going to be the biggest issue. you know, the vice president really should take advantage of this and get out more. i think he had one other gain. his campaign has been looking, and democrats in general, have been looking for an excuse not to do a second or third debate, and this may give them that excuse the vice president, most people

think he probably won, although it's hardly overwhelming, and he did not show himself to be vigorous he certainly showed himself to be not senile, but he did look quite frail. i always watch debates with the sound off, because in effect, that's what most americans do. if you look at it from the sound off, i think the president looked the part, and the vice president did not. >> well, i hadn't heard of that tactic before, to watch it with the sound off, but i might have to try it. >> i've been in this game a long time, kelly. think about people watching the nightly news, right? they've got the kids running around, they're cooking dinner, they have it on in the background, and most of it is visual and in 1992, then-president bush destroyed his election chances by taking two seconds and glancing at his watch. in 1960, the people who listened

to the debate on the radio thought nixon won. those who watched it thought kennedy won. it's visual, i'm sorry, it is not audio. >> all right well, let me turn to something that was purely numbers based and that was the jobs report this morning you had a really interesting take on it we talked about the slowing of momentum we're going to speak more about this a little later on, but you're really focused on the wage numbers and what you say is a labor strike in a way that's going on across this country because workers on the front line kind of jobs in retail, you name it, they don't want to go into an unsafe situation you think they're going to have to bid up wages to get them back how does this play out over the next several months, do you think? >> i think wages are going to continue to go up. real wages, i think, are, you know, kind of -- have been going up, and i think that trend is going to continue. but particularly in lower wage occupations, and particularly

where there is a lot of contact with the public, i think that firms are simply going to have to pay more to attract the workers. we also have other industries, notably construction, where everyone says there is a great shortage of workers. so i don't think you should look at, what, a 7.8% unemployment rate and say, oh, my gosh, we've got lots of slack in the economy. there is actually a bunch of separate economies going on, and some of them are actually quite tight and some of them are not >> yeah. >> so, yes, i think we're going to -- i think we've probably by now, at the margin, met the feds' 2% target and we're going to be exceeding it as we go into next year. they said that's fine with them. i believe that's what they believe, but we are faced with covid costs, we are faced with higher labor costs, and we have

more than adequate demand out there as the consumer spending numbers showed i think that we va inflatihave n on the way, yes. >> i want to sneak in one other question to put a kind of button on this. given what you laid out, do you think we still need fiscal stimulus and do you think we could be talking about the s&p at 4,000 next year >> the problem with monetary stimulus is that it tends to go into asset prices. it doesn't trickle down very well fiscal stimulus done right, meaning direct payments to households, is, i think, much more effective for the economy so although i think not passing a bill, i would call it survivable, certainly if you want to lower chances, you want to have a solid bill, one that

is focused in particular on healhelp for households >> yeah. larry, appreciate checking in with you, especially on a very big day like this. thanks for joining me. thank you so much. >> my pleasure, kelly. have a good day. >> larry lindsey with the lindsey group. let's talk a little bit more about the market right now with stocks well off their lows in the session and the dow turning positive after more than a 400-point drop earlier here to share their thoughts on the markets, kim forrest and steve amherst. welcome to you both. kim, since you're the market maven here, you just heard larry lindsey and what do you believe he is correct on, if you do? >> i agree with lower income

households not getting their needs met if we don't pass some sort of fiscal stimulus. i think what drove today's markets was the news that those talks had continued. although yesterday it looked like they were drawing to a close. so i strongly believe that the politicians understand that is an election, but they actually have to do something before the election, or, you know, maybe the populace won't elect the people they want him to. those are all good news for the people that need to be helped. >> it's a good point steven, that brings us to this debate over whether that aid, that support might be coming in the next couple weeks now. what is your own odds at this point? >> of a stimulus package i think it's less than an odds on bet at this point, at least until after the election it just feels like congressional negotiators are dug in the two sides are far apart.

it's a little ironic because i think the administration is the one entity that's actually in the middle, is willing to compromise and is eager for a deal my sense is that the house democrats and senate republicans are kind of locked in with their positions and they're just not willing to meet in the middle at this point >> where does that leave you on the economy, and do you agree with what larry said about the inflation that he is seeing in certain industries and parts of the labor market, stephen? >> yeah, i would say largely so. i think what he said about the stimulus i would agree with, that it's survivable but it would obviously be better if we had stimulus for the economy in the short run. i think what we saw in the income numbers that came out yesterday for august is that household finances in the aggregate are still in very good shape, just because the federal government largesse has been so generous that for the most part households are still in good

shape. we did see the labor market strengthen today, but i think we're certainly headed in the right direction, and i don't think we'll have a big positive effect if we don't reach a deal in the next month or two down today, big tech in particular what do you think is going on here how would you explain the moves in the nasdaq, really going back to the beginning of last month, kim? >> sure. i think a lot of consumer tech which has driven the market has some question marks around it. if people aren't being able to -- you know, if there's large numbers of people that could be laid off like disney and other entertainment-oriented industries and travel, if those people don't return to work, what is going to happen to some of the companies that they've been using while they've been on hiatus and being paid for it

i have to tell you, i think netflix could suffer i know everybody thinks, what are you going to do at home, then i don't know, maybe look for another job. these are the things that we have to look at. but i also think that those names were more than fully valued a month ago, and they've kind of come back down to reflect lower revenue expectations in the short term and i think that's probably right. >> that's fascinating, that we may be moving from that period of intense -- everybody holing up at home there is government support and now we're in a tougher economy, frankly, and one where maybe netflix isn't there the way that it was kim forrest, stephen stanley, thank you both for your thoughts today. really appreciate it we'll watch this market, as we mentioned, coming well off the lows of the session. tech is still the laggard, though still ahead on "the exchange," we'll talk about the new

mortgage bailout numbers that suggest it's not all rosey in te housing market we'll break down the new data. plus the word we got before the election this morning does show the economy is slowing. we'll talk with the economists and more here on "the exchange." stay with us

welcome back to "the exchange." weekly mortgage bailout numbers are out and the down trend we've seen over the past six weeks has reversed diane olich is here with the full details for us. diana? >> kelly, after improving for six straight weeks, the numbers are going in the wrong direction again. the amount of mortgages in pandemic-related bailout plans rose by 21,000 in the past week, that according to black knight as of september 29th, roughly 3.6 million homeowners remain in forbearance. that is $6 billion in bailout. those were with declines of

fannie and freddie loans mortgages initiated at the start of the pandemic, they allowed homeowners to delay their payments for up to a year. it's granted in three-month terms, and so far more than 75% of borrowers in bailouts are on extensions since march kelly? >> diana, this goes back to the very discussion we've just been having and the big one hanging over the economy these relief programs have really gone a long way they seem to be quite popular, but what happens when they run out? we're still a little ways off from that, but what do these latest data tell you >> well, what we're seeing with these extensions is very troubling, because we want to see people start to come out of these forbearance programs and make their payments. they don't have to make up their payments at the end of the plans, they can tack it on to the end of the loan or refinance when they sell their house but if we get to where we're

supposed to be, what happens for those borrowers? after six months, it doesn't appear to be getting much better >> diana, thank you very much. diana olich on the housing industry for us. coming up, the state of stimulus seems to be changing by the moment with new developments just in the last hour. we'll get you the very latest and see if the news of the president's covid-19 diagnosis, what that could mean for policy negotiations we'll also hear from head of the counsel of economic advisers on today's job report. the last one before the election thess e first one since april wi lthan a million jobs added. we're back after this. like where to find the cheapest gas in town and which supermarket gives you the most bang for your buck. something else that's good to know. if you have medicare you may be able to get more benefits without paying more through a medicare advantage plan. call now to request this free guide. learn about plans that could give you more benefits from humana. a company with nearly 60 years of

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welcome back to "the exchange." let's get a check on markets in what's been a very volatile day. right now the dow is up by 25 points we were down more than 400 earlier and futures were down more than 500 points overnight after the president's positive covid diagnosis. the s&p is down 13% right now. we have industries and industrials leading, energy a quirky one because oil is still under pressure let's take a look at the dow your individual dow winners today are caterpillar and dow itself caterpillar, of course, with a 3% gain helping the industrials. lagging is microsoft

big tech lagging among the losers, activision, adobe, autodesk and take-two interactive. the september jobs report is unemployment is down 7.9%. with me is the acting chair of economic advisers. it's good to have you. welcome. >> good to be here >> do you support more stimulus to help this economy, because i look at the number of permanent layoffs and the way that it's climbing and the fact that we're only kind of gotten half the jobs lost back, and you worry a little bit about what's coming in the months ahead. >> well, we certainly would, as always, have hoped to see a bigger monthly jobs gain in september. when we're looking at the data,

what we see is that the private sector added 887,000 jobs in the month of september to put that in perspective, pre-2020, that would have constituted the third biggest monthly jobs gain on record, and this is in the context of nine states actually reversing reopening during the month of september, including the states of california, texas and illinois so the first, second and fifth biggest state economies in the u.s. for the ten states who are pausing reopening during the survey referencing period, so i think it's important to bear in mind that context. we have regained more than 50% of the jobs lost in march and april, but there is more work to be done, and the remaining 48% are certainly going to be harder than the first 52%, and that is why the administration remains committed to achieving a phase 4 deal that would include provisions like a revote on the paycheck protection program,

that would include a second round of economic impact payments, that would include support for airlines that have been really struggling that's an industry really struggling in this pandemic context. and we're very keen for moving on that front, and my colleague, the treasury secretary, remains engaged for talks to continue. >> let's talk about the labor market where job loss has gone, to some extent, from temporary job loss to more permanent job loss it makes sense, there are industries that it's obvious they're not going to need the kinds of workers they had before this pandemic for possibly several years. so what happens to the workers who are let go from those industries do you think that they'll be able to find work in some of the other industries where there are still labor shortages? do they need to be supported until they can go back to what they were doing previously, and how does that all bear on where the unemployment rate goes from

here >> so the increase in permanent job losers in the month of september is definitely something that we were paying close attention to also we saw there was an increase in folks not in the labor force, though when we look at the underlying data, we see many of those folks were not in the labor force because they hadn't actively searched for work in the past four weeks due to concerns about the pandemic but definitely this is one of the reasons why we want a phase 4 agreement that would provide additional support to the economy, that would provide additional incentives for employee retention and net hiring but here again, i think it's important to maintain some perspective. in just two months' time, we have reduced the unemployment rate from 10.2% to 7.9%. in the aftermath of the previous recession in 2008 and 2009, it took three years to reduce the unemployment rate from 10% in october 2009 to 7.9% in

september 2012 i think the speed of the recovery thus far has been unprecedented, and we certainly want to maintain that pace and even accelerate it >> yes, we need good speed, mr. goodspeed. thank you for joining me, sir. we appreciate it tom goodspeed, the chair of economic advisers. let's move to sue herera who has our update sue? >> here's what's happening, everyone the fed chairman found out hope hicks had tested positive when the president was leaving washington, but the president continued on to the fundraiser in new jersey, even though there was a chance he had been ex pou exposed. >> we discovered that right as the marine one was taking off yesterday, we actually pulled some of the people who had been traveling and in close contact

we had already started the contact tracing just prior to that >> that explanation, though, is not playing well near where the trump campaign event was held. one resident had sharp words for the president. >> if you know that you possibly have been infected by somebody right next to you, you should stay home and not spread it, especially with the numbers going up the way they are. totally irresponsible. in kentucky grand jury testimony in the breonna taylor case has been released officers say they knocked repeatedly on taylor's door, even though they had a no-knock warrant. officers also said they did not search for drugs despite entering the apartment on a narcotics warrant. you are up to date on a very busy news day, kelly i'll send it back to you >> boy, is it. sue, thank you very much our sue herera coming up on the trail, we'll look at what the president's covid-19 diagnosis could mean for both campaigns with just a little over a month

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welcome back to "the exchange." markets mounting a major comeback today after a steep fall on the news that president trump tested positive for covid-19 what does it all mean now for negotiations on additional stimulus relief? ylan mui has been following the twists and turns for us. ylan, it feels like every half hour there is something new today. >> reporter: well, kelly, right now it looks like more aid is coming, at the very least, for the airline industry house speaker nancy pelosi issuing a plea to the industry this afternoon, calling upon the airlines to delay their devastating job cuts as relief for airline workers is being advanced in congress she said that lawmakers want to extend the payroll support program by six months either through a standalone bill that has bipartisan support or through a comprehensive negotiated relief package. now, just last night it seemed like the prospect of a deal with the administration was looking pretty grim, but this morning

majority leader steny hoyer sounded a lot more optimistic. >> hopefully those negotiations will bear fruit sooner rather than later when i say sooner rather than later, i hope that this weekend perhaps an agreement can be reached. >> reporter: kelly, he said that right now both sides are operating with good will back over to you >> ylan, if there's movement, where is the movement coming from which side and toward what kind of middle goal, do you think >> reporter: i think it could possibly come from both sides here pelosi had been holding firm against doing any kind of piecemeal action on stimulus here with this announcement, saying that she would look at a standalone bill for the airlines, perhaps a sign that she's willing to bend there. meanwhile on the republican side, democrats are saying this could be the moment where they look at the money that's needed for things like testing, tracing and treatment and say, it is time to come back to the table

and do another deal and perhaps spend more money on that deal. so we will be watching to see where both sides land. >> yeah. good points. ylan, for now, thank you very much our ylan mui from washington to when we could possibly expect a stimulus package, we have tony frado and former white house deputy press secretary under george w. bush he is also a cnbc contributor. welcome to you both. stephanie, last time we spoke, you didn't think it was very likely we would get another bill correct me if i'm wrong, maybe before year end but certainly not before the election. would you update that thinking now? >> so the reason i'm not quite ready to update that thinking is i don't really know why pelosi has agreed to do this piecemeal. she had been very adamant, as ylan mui was saying, about not moving a covid piecemeal, and

the reason to do that is because you can extract more things you know you need to get for your base, your rank and file, your progressives, whatever it is, you need to have some leverage if she is saying, you know what, we can do this very important thing piecemeal, then i don't know how she can come to the negotiating table with the leverage she needs to reach a deal >> yeah. so, tony, what about you does this suggest more movement to you and by the way, there is probably a big difference between there's going to be relief for airlines and there's going to be a trillion-dollar relief package for the whole economy. >> i've been a fairly lonely voice, i think, over the past few weeks, especially, when people are still holding out the likelihood that a deal was going to get done, and even over the past week it looked to me like the kinds of negotiations that you see that go down to the wire where both sides are trying to find ways to find that saddle

point where they can give and can't give i think that's where they're going to be. i think the number will begin not with a 2 but with a 1. it will be in the $1.75 trillion range, and both sides will have been able to say that they fought for all they could, and that, you know, doing nothing isn't satisfactory i think the news today, both on the jobs front and on the news with president and mrs. trump, that it's a volatile situation i don't think these guys want to go into the next four and a half weeks without having some protection to do something good for this economy >> let me follow up on that, tony, because from a purely politics point of view, why, if this would ostensibly help president trump's re-election odds, why would they agree with a $1.75 trillion figure?

>> i think there are things to be gained here, one, the democrats saying they responded and were able to take action for the things they care about, so i think that's important i think it obviously matters for trump who really, really needs something to change the dynamics of this race in some way and, you know, we saw with the debate earlier this week, it's not going to come from there this would really take the air out of markets and it might show a split between the white house and the trump campaign and congressional and senate republicans who are out trying to campaign. >> stefanie, what would you add to that, and if we get movement and we get a bill in the next few weeks, what kind of ramifications would that be? >> i was actually bullish this could happen until the scotus nomination fight became front and center

and at that point it just seemed like the politics were getting way too heated for either side to be able to give on a deal i think that this argument that both sides want something is very true. the argument that the country needs it is true both sides have wanted it and the country has needed it for months it's hard to know what the catalyst will be, but it's very true, seeing both sides come together indicates that the politics are arguing with them that they need to figure out how to reach a deal, so it would actually be pretty positive if they did >> yeah. all right, guys, thank you we'll leave it there for now great to see you both, stefanie miller and tony fratto

coming up, with headlines coming fast and furious out of d.c. today, should investors make any moves in their portfolios or stay the course? we'll discuss that and tesla posting lower than expected delivery numbers. tesla off 6.5% right now bed, bath & beyond adding another 1.96%, and twilio back up after july. we're back in two. this is decision tech.

find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

a pretty wild day for the markets. the dow briefly turned positive after falling more than 400 points following the announcement president trump tested positive for the novel coronavirus. the dow is now back down about 100 points and the nasdaq off by 2% all of this as the house passed a $2.2 trillion stimulus bill last night, but now we await headlines on what the fate of that might be. let's bring in barry mack.

barry, it's good to have you it sounds like based on the conversation we just had a few moments ago that the odds for some kind of relief package are a bit higher now, and where do you think that leaves the market >> i was a little taken aback by the initial market reaction this morning, because my response to that diagnosis of the president was that this would actually embolden the purveyors of lockdown nation, those that really advocated non-pharmaceutical inventions. so i thought that meant tech ought to really rally. that was okay with me, i upgraded it a week ago after having downgraded it in august but the rally seems to be all about a fiscal stimulus package. now, i understand the logic of this which is the idea that, you know, you create a whole lot of fiscal stimulus, it's monetized by monetary policy, and that lifts asset prices

i think, though, the market is going to look through that fairly quickly now, by "fairly quickly," i don't mean necessarily between now and the end of the year. the market might grasp onto all that and say, okay, we're just going to throw a lot of liquidity at the problem and the markets are going to rally but i think when we move into 2021, we're going to realize that transfers to state and local governments will slow the reopening process. more $600 supplemental will slow the labor market npis or lockdown written all over it, you could see sectors like retail and construction doing much better than hospitality or education or health, the state teacher jobs that were lost all of this speaks to how quickly we reopen and safely we

reopen, so that to me is the bigger, longer term issue for investors who are more concerned with the performance of the next year rather than the next couple of months. >> so, barry, it's interesting, because you're saying basically as goes kind of the lockdowns, so goes the economy and so goes the markets. you think trump's diagnosis makes lockdowns more likely. is that even if he kind of shakes it off? >> no, that's a point i was going to add on for sure, is how well he does will determine the path of the lockdowns and may, you know, be an opportunity for him to turn around the possibility or probability of being re-elected as well if he shakes it off, if he responds to it like bolsonaro or even boris johnson who seemed to get through it and able to work through most of it -- although i think johnson is probably sicker than bolsonaro -- but if he's able to work through this

process, he gets to do a little "i told you so" and that might actually help his election prospects and certainly will help the reopening process >> barry, real quickly, then, where would you put investors, in the reopening trade -- that's one and the same into the reopening rotation or stick with lockdown nation >> i've liked the technology sector because of secular trends like movement to the cloud, digitization i would still be market weight in that, i wouldn't be underweight. but i'm not going to pull the rug out from under the be long in cyclicals, be long in industrials, be long in materials. i do think we'll show in the reopening process, small business employment relative to large business employment, so i want to stick with that cyclical

impulse, but we may have been dealt a setback depending on how the president responds to the virus in the next two weeks. >> yeah. it is amazing how much it's going to come down to that barry, appreciate you connecting the dots for us today. thank you, sir >> we continue to follow all the economic fall out from everything happening in washington we're about a month away from the election in which the president says that mail in voting could be a disaster what could a drawn out dispute mean for the credit ratings of cities, states and the country we'll dig into that next we're back in two. one day we'll look back and remember the moment that things, for one strange time in our lives, got very quiet. some lost work and invented new ways to get by. others were busier than ever,

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welcome back treasury yields largely tracking stocks today after declining on president trump's positive covid test the ten years now just off the session highs it hit on stimulus we continue to fluctuate on all of these headlines out of washington this afternoon. larger question is how this uncertainty his impact on the

government's credit. >> it's my pleasure to be here i want to be clear that we do not downgrades my worry is better than inconsistency and methodology. for instance, the number of downgrades the amount of downgrades far higher than what we have witnessed in this pandemic

it's a cluster of downgrades that is not good for invisers. a large fiscal stimulus package that could reverse some of the duration that they have witnessed. it's something for a very long time that maybe the ratings were too conservative in the beginning and now with the deterioration they have come in parity with the other asset classes. >> let me ask you, what you're warning about is we could see a raft of downgrades toward the end of the year as the ratings firms catch up with the developments what would your advice be to

investors who say i would like to avoid that kind of headline risk where should i be positioned what would you say >> kelly, unquestionably bullish on the market. the reason is simple two reasons. firstly, the state and local governments are facing large deficits how do they make up for that that could reverse

there are very few things left if the tax rate goes up, the value of municipals will go up that's why there will be a steady rush of demand. one way or the other, taxes are going up >> we got to go. i hate to cut you off. we're up against the end of the show i think your point about higher taxes making munis attractive in spite of everything is the right place to leave it. thank you for your time today. we appreciate it

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